One Year Later: No progress on a new financial architecture

Updated

A year ago, I suggested that finance plays too large a role in our e

new-financial-architecture
new-financial-architecture

conomy. It's supposed to support the investment decisions of CEOs, but it has turned into the tail that wags the economic dog -- accounting for 8 percent of GDP, double its level in the 1960s Not only does finance come up with new products and then sell the world on buying them to boost banker pay, but it expects -- and gets -- society to use taxpayer money to keep the bonus money rolling in when those products implode.

That's why I thought in September 2008 that it would be helpful to re-architect finance. So far, there has been no progress along the lines I proposed and I believe that the moment of urgency on which to base such reform has passed. Therefore, we are almost assured of future financial panics. So for those who will be around the next time a crash happens, here are six principles -- five I mentioned last year and one new one -- upon which we could base a new financial architecture:


Advertisement